An analysis of the collusive game and governance strategy between the supervisor and the contractor under the asymmetric information

Abstract

Project contract is the incomplete contract and the rights and obligations between the parties of the contract cannot be accurately determined because of the inherent characteristics of asymmetric information, incompleteness, the parties' bounded rationality and each party in pursuit of maximizing their own interests. This gives rise to the collusive risk of the project in the process of construction between the supervisor and the contractor. This study firstly takes the supervisor and contractor as each party of the game by using the view of game theory and establishes the game model based on the theory of asymmetric information and then analyzes the effective treatment for both parties' gambling behaviors, finally discuss the governance strategy on the prevention of the collusion between the supervisor and constructor. © 2013 Asian Network for Scientific Information.